The federal government has announced its fiscal targets for the next year. The plan aims for:
- 4% GDP target
- 8.2% inflation rate
- 3.6% budget deficit
- 2% primary surplus
The Macroeconomic Ledger
Interest payments on old loans and defense spending remain the highest expenses for the state.
| Financial Indicator | Amount (PKR) |
| Total Budget Outlay | Rs 18,771 billion |
| Current Expenditure | Rs 17,495 billion |
| Loan Repayments & Interest | Rs 8,054 billion |
| FBR Tax Target | Rs 15,264 billion (up 17% / Rs 2,259 billion) |
| Net Federal Income | Rs 11,751 billion |
| Non-Tax Revenue | Rs 5,336 billion |
| Defense Allocation | Rs 3,000 billion |
| Grants / Subsidies | Rs 2,680 billion / Rs 1,091 billion |
| Pension Budget | Rs 1,169 billion |
| Subsidies Portfolio | Rs 1,091 billion |
| Civil Administration | Rs 1,071 billion |
| Federal Development (PSDP) | Rs 1,000 billion |
- NFC Award: Provinces will receive Rs 8,848 billion from federal revenue but will give back over Rs 13,350 billion in collected taxes as a grant to the federation.
- Development Split: Out of a Rs 3,675 billion total national development portfolio, Rs 2,224 billion goes to provincial development.
Tax Relief and Incentives for Businesses
For Salaried Individuals
The government has completely abolished the 9% tax surcharge on salaries. While citizens earning under Rs 2.2 million annually received no new tax relief, the government expanded the total tax brackets from 6 to 8 slabs, reducing tax rates for four major upper-income slabs.
| Salary Slab | Tax Rate |
| Up to Rs 600,000 / year | 0% tax |
| Rs 600,000 to Rs 1.2 million / year | 1% tax |
| Rs 1.2 million to Rs 2.2 million / year | 11% tax |
| Rs 2.2 million to Rs 3.2 million / year | Cut from 23% to 20% |
| Rs 3.2 million to Rs 4.1 million / year | Cut from 30% to 25% |
| Rs 4.1 million to Rs 5.6 million / year | Cut from 35% to 29% |
| Rs 5.6 million to Rs 7.0 million / year | Cut from 35% to 32% |
Government salaries and pensions will rise by 7.7%, and the minimum wage has been increased by 10%.
Supertax Cuts
- Supertax is completely abolished for companies earning between Rs 150 million and Rs 500 million.
- For incomes above Rs 500 million (cement, steel, chemical, and energy sectors), the tax dropped from 10% to 8%.
- Banks, fertilizer, and oil/gas firms see no change.
Fixed Tax for Traders
- Small shopkeepers making under Rs 200 million will pay a flat 1% tax on annual sales with a minimum Rs 25,000 filing fee.
- They do not need POS machines, are exempt from audits, and FBR teams cannot enter their shops for questioning.
- They will display a green plaque with a verification QR code.
Business Relief
- Export advance tax cut from 2% to 1.25%.
- Rs 88 billion added to export refinancing.
- Capital value tax on foreign assets completely abolished.
FBR Faceless System
- A new National Faceless Center will stop direct contact between taxpayers and officers to reduce bribery.
- FBR will build digital profiles using vehicle, property, bank, and utility data.
- Real-time production monitoring will become mandatory for the textile, steel, beverage, ghee, tire, and paper sectors.
Infrastructure, Power, and Development Allocations
Real State
To revive 40 industries like cement and steel, withholding taxes on property transfers were slashed for tax filers:
- Property Purchase (Filers): Cut from 2.5% to 1.25%
- Property Sale (Filers): Cut from 5.5% to 2.75%
- Housing: Rs 54 billion was given to housing, including Rs 71 billion for the PM Apna Ghar Scheme to build 150,000 affordable homes.
Development Funds
Power:
- Subsidies dropped from Rs 893 billion to Rs 830 billion, and direct payments to IPPs will end.
- Petroleum subsidies will end next fiscal year.
BISP: The budget was raised by 17% to Rs 838 billion to support 12 million families.
Regional Allocations
| Merged Tribal Districts | Rs 56 billion |
| Azad Kashmir | Rs 45 billion |
| Gilgit-Baltistan | Rs 44 billion |
Education & Health
| Higher Education | Rs 46 billion |
| Science & Information Technology | Rs 41.4 billion |
| Danish Schools | Rs 22 billion |
| Federal Education | Rs 36 billion |
| Health projects | Rs 25.1 billion |
| PM Youth Skill Scheme | Rs 7.9 billion (for youth who make up 67% of the population) |
Infrastructure
Dams
Total water projects get Rs 143 billion, including the following:
- Mohmand Dam (Rs 22 billion)
- Dasu Dam (Rs 15 billion)
- Diamer-Bhasha Dam (Rs 14 billion)
- Battery storage (Rs 3 billion)
National Highway Authority (NHA)
The highest amount of Rs 365 billion is allocated for infrastructure in the budget.
| Karachi-Chaman N25 Expressway | Rs 100 billion |
| Transport | Rs 93 billion |
| Sukkur-Hyderabad Motorway M-6 | Rs 30 billion |
| ML-1 Railway Karachi-Rohri | Rs 25 billion |
| Karachi Industrial Park Block A/Project 4 | Rs 10 billion |
Different Sectors
Oil & Gas
- The current fiscal year saw 17 new discoveries.
- 16,000 barrels of oil and 229 mmcfd of gas were added into the system.
- 24 offshore drilling licenses have been issued.
Travel and Health
- Federal excise duty removed for business class air travel.
- Customs duty abolished on raw materials used for manufacturing medicines.
IT Sector
- The 0.25% tax rate on IT export earnings is extended until June 30, 2029.
- International card transaction withholding tax is slashed from 5% to 0.5%.
Luxury Vehicles
- Large imported SUVs and cars from 2,000 cc to above 3,000 cc will become more expensive.
- Luxury electric vehicles costing over Rs 20 million will also face new taxes.
- A concessional 1% tax remains for regular e-bikes, rickshaws, buses, and newly added e-trucks.
